Excerpt:company - maintainability of petition - sections 2 (27), 41, 60, 75, 111, 114, 155, 210, 397, 398 and 399 of companies act, 1956 - whether member of company on transferring his shareholding to another person but whose name continues to be on register of members of company as company has not deleted his name and entered name of transferee in his place can maintain petition under sections 397 and 398 - power of attorney given by respondent-bank as holder of 16706 shares must be construed as it stands - under clause 1 of concerned power of attorney holder can exercise all rights and privileges that holder of 16706 shares could have exercised - this would include right to file petition under sections 397 and 398. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta.....mrs. sujata manohar, j.1. five petitioners have filed this petition under ss. 397 and 398 of the companies act, 1956, against killick nixon ltd. and the other respondents. the petitioners are the bank of india, the union bank of india, dhanraj mills pvt. ltd., mahesh jayantilal patel and tejkumar balakrishnan ruia. the petition on behalf of the bank of india and the union bank of india is signed by petitioner no. 5, tejkumar balkrishna ruia, as their constituted attorney. in the petition, it is stated that the bank of india holds, inter alia, 17,187 fully paid up shares in killick nixon ltd. (hereinafter referred to as 'the company'). the register of shareholders of the company shows the bank of india as the holder of 17,187 fully paid up shares. the bank of india has sold 16,706 shares.....

Judgment:

Mrs. Sujata Manohar, J.

1. Five petitioners have filed this petition under ss. 397 and 398 of the Companies Act, 1956, against Killick Nixon Ltd. and the other respondents. The petitioners are the Bank of India, the Union Bank of India, Dhanraj Mills Pvt. Ltd., Mahesh Jayantilal Patel and Tejkumar Balakrishnan Ruia. The petition on behalf of the Bank of India and the union Bank of India is signed by petitioner No. 5, Tejkumar Balkrishna Ruia, as their constituted attorney. In the petition, it is stated that the bank of India holds, inter alia, 17,187 fully paid up shares in Killick Nixon Ltd. (hereinafter referred to as 'the company'). The register of shareholders of the company shows the Bank of India as the holder of 17,187 fully paid up shares. The Bank of India has sold 16,706 shares out of these shares to Dhanraj Mills Pvt. Ltd. These shares, however, have not been transferred by the company in its register of shareholders in the name of Dhanraj Mills Pvt. Ltd.

2. The Union Bank of India holds, inter alia, 5,000 fully paid-up equity share in the company and its name is shown on the register of shareholders of the company as the holder of these shares. The Union Bank of India has sold these 5,000 shares to Dhanraj Mills Pvt. Ltd. The transfer has not, however, been effected in the register of shareholders by the company.

3. Dhanraj Mills Pvt. Ltd. is also a member of the company and holds 20 fully paid-up equity shares in the company. Petitioner No. 4, Mahesh Jayantilal Patel, is also a member of the company and holds 20 fully paid-up equity shares in the company. Tejkumar Balkrishna Ruia, who is the fifth petitioner, holds 10 fully paid-up equity shares of the company and his name is whom as such in the register of shareholders of the company. Four other members of the company holding 11,253 shares have consented to the petition being filed. Letters of consent on their behalf are signed by the fifth petitioner, Tejkumar Balkrishan Ruia, who holds a power of attorney from these consenting members. The members so consenting are Hiralal Amritlal Kotadia, who holds 5,466 shares, Amit Hiralal Kotadia, who holds 267 shares, Ravindra Mulraj, who holds 4,150 shares, and Jawahar Ravindra Mulraj, who holds 1,400 shares.

4. After this petition was admitted, the company and the other respondents took out a judge's summons praying that the order admitting the company petition should be revoked or set aside and the company petition should be dismissed. The pleas which were taken in the Judge's summons were taken on a demurrer on the basis that the petition as filed was not maintainable. Basically the contention of the respondents was that petitioners Nos. 1 and 2, viz., the bank of India and the Union of bank of India, could not be considered as 'members' of the company for the purposes of ss. 397 and 398 of the Companies Act, 1956, inasmuch as they had sold their shares and, as such, they did not have the necessary 'interest' to maintain the petition. In their absence, the other petitioners could not maintain the petition under ss. 397 and 398 of the Companies Act as they did not have the necessary shareholding contemplated under s. 399 of the companies Act. The respondents also submitted that the consent given by the holder of the power of attorney on their behalf had no right in law to give such consent. The contention of the respondents were rejected by a learned single judge of this High Court who dismissed the judge's summons of the respondents by his judgment dated December 9, 1981. The company and the other respondents have thereupon filed the present appeal.

5. The basic question that requires determinations is whether a member of a company who has transferred his shareholding to another person but whose name continues to be on the register of members of the company because the company has not deleted his name and entered the name of the transfer in his place, can maintain a petition under ss. 397 and 398. Section 397, in plain language, states that a petition can be filed by any member or members of a company. Such a petition can be filed by them if the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner which may be oppressive to any number or members. Such members who are being oppressed may or may not include the petitioning members. Under s. 398 also, a petition can be filed by any member of the company. Such a petition can be filed if the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interest of the company. Under sub-s. (1)(b) of s. 398, a petition can also be filed if, as a result of any material change in the management or control of the company as provided therein, it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interest of the company. Under ss. 397 and 398, there is a further qualification in respect of the members of the company who may wish to file a petition. This qualification is spelt out in s. 399 of the Companies Act. Under clause (1) of s. 399, the members coming before the court must constitute not less than 1/10 the of the total number of members or a minimum of 100 members, whichever is less : in the alternative, any member or member who hold not less than 1/10th of the issued share capital of the company are also entitled to file a petition under s. 397 or s. 398 provided they have paid all calls and other sums due on their shares.

6. Under ss. 397 and 398, as they stand, therefore, any member or members who have the requisite qualification under s. 399 can file a petition under those sections.

7. We have to examine whether there is any good reason for departing from the plain meaning of these sections and read down then term 'member' in order to exclude from its ambit 'bare' members whose names continue on the register of members although they have sold their shares. Who is to be considered as a member for the purpose of ss. 397 and 398 of the Companies Act Section 41 of the Companies Act defines a 'member' as follows.

'41. Definition of 'member'. - (1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company and, on its registration, shall be entered as members in its register of members.

(2) Every other person who agree in writing to become a member of a company and whose name is entered in its register of members, shall be a member of the company.'

8. We are not concerned here with s. 41, sub-s. (1). Under s. 41, sub-s. (2), a person whose name is entered in the register of members hall be a member of the company. Ordinarily, the name of a person who does not hold shares in a company cannot be entered in the company's register of members. Hence, there is no distinction between a member and a shareholder in the case of a company having a share capital. In A. Ramaiya's Guide to the Companies Act, 9th edition, page 123, it is stated as follows :

'In the case of a company limited by shares, a company limited by guarantee and having a share capital and an unlimited company whose capital is held in definite shares, the terms 'member' and 'shareholder' are synonymous and there can be no membership except through the medium of shareholding.'

'In the case of a company limited by shares, a member is a person holding shares in the company; there can be no membership, i.e., proprietary relationship to a company, otherwise than through the medium of shareholding. Consequently the terms 'member' and 'shareholder' are synonymous, apart from the now exceptional case of the bearer of a share warrant who is a shareholder but is not a member because he is not registered in the register of members.'

10. Section 2(27) of our Companies Act also spells out the same exception when it states that a 'member' in relation to a company does not include a bearer of a share-warrant of the company issued in pursuance of s. 114. In the case of Howrah Trading Co. Ltd. v. CIT : [1959]36ITR215(SC) , the Supreme Court has also observed that (at p. 287 of 29 Comp Cas) :

'The words 'holder of a share' are really equal to the word 'shareholder', and the expression 'holder of a share' denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members.'

11. It is important to bear this in mind because Mr. Chagla, learned counsel for the company, has sought to base his arguments on the distinction between the right of a member and the right of a shareholder of a company. He has submitted that there are certain right which are given to a member irrespective of his shareholding while there are other rights which are directly proportionate to his shareholding. The former, he has designated as the rights of a member and the latter, as the rights of a shareholder. The argument, though attractive, is fallacious. The Companies Act does not contemplate a member who has no shares in the company. It is true that under the provisions of the Companies Act, there are various types of rights which have been given to the members of a company. Some of these rights which are given to a member are not dependent on the number of shares held by him. e.g. the right to attend or speak at a meeting of the company, the right to take inspection of the various registers of the company, the right to receive notice of meetings and so on. Their are other rights which are given to the members which are directly proportionate to the number of shares held by them, e.g., the right to receive dividends, the number of votes cast by a member on a poll and so on. There are also other rights which may be exercised by a member on a poll and so on. There are also other rights which may be exercised by a member either jointly with other members or by himself if he holds the requisite minimum number of shares. Thus, for example, under the articles of association of a company, there may be a minimum share qualification for a member who wishes to stand for the post of a director. All these rights are in direct proportion to the number of shares held, it may be possible to look upon such rights as right which are attached to the shares. But the rights of all types are rights enjoyed by the members of a company.

12. Mr. Chagla, learned counsel for the company, has submitted that a member who has transferred his shares enjoys only what he calls the rights of a member. He cannot exercise the rights of a shareholder. He has then submitted that the right to file a petition under ss. 397 and 398 is the right of a shareholder. A 'bare' member who has transferred his rights as a shareholder to others cannot file such a petition. There are a number of fallacies in this argument. In the first place, there is no distinction between the right of a member and the rights of shareholder. A company recognises only its members as its shareholders and confers on them certain rights. A peculiar situation can, however, arise in the case of a member who has purchased the shares of the company is entitled to have his name entered in the register of members of the company may have under its articles a right to refuse to register the transfer of, or the transmission by operation of law of the right to any shares of the company. In such a case, a transferee who has been refused registration may go in appeal to the Central Government under the provisions of s. 111 of the Companies Act. He is also entitled to take action for rectifying the register of members under s. 155 of the Companies Act if the company has refused registration of his name is as holders of the shares which they have purchased from the Bank of India and the Union Bank of India. The company refused to register these transfers. We are fold that an appeal under s. 111 as well as an application under s. 155 of the Companies Act are both pending. In the meanwhile, however, since the transfers are not members of the company in respect of those shares, it would not be open to them to file a petition under ss. 397 and 398 of the Companies Act relying on these shares as qualifying them under s. 399 of the Act. The question is whether they can file such a petition through the transferors.

13. For this purpose it is necessary to examine the nature of the relationship between (1) the transferor on the one hand and the transferee of shares on the other hand, (2) the company on the one hand and the transferor on the other hand as also, (3) the company on the one hand and the transferee on the other hand. If we first examine the relationship between the transferor and the transferee, it is now well established that the transferor is in the position of a constructive trustee who holds the shares which have been sold for the benefit of the transferee. As such constructive trustee he is required to carry out all the just demands of the beneficiary. This relationship has been explained by our High Court in the case of E. D. Sassoon & Co. Ltd. v. K. A. Patch : (1943)45BOMLR46 . Pratt J., in that case observed as follows :

'... under s. 94 of the Indian Trusts Act, the transferor holds the shares of the benefit of the transferee to the extent necessary to satisfy its demands. Accordingly as the transferee holds the whole beneficial interest and the transferor has none the transferor must company with all reasonable directions that the transferee may give. The reason for this is plain, for the equitable interest of the beneficiary is brought into existence by the Court of Chancery for the seller of the shares to take advantage of non-registration and to deal with the shares to take advantage of non registration and to deal with the share his own after taking the price from the purchaser. Equity therefore treats the purchases as if the was real owner and compel the registration bolded to act as the agent of the beneficiary. For this reason the Beneficiary has a right to control of excised by the trustee of the right to vote.'

He has also further observed that as a trustee of shares, the transferor, is also a trustee of all property rights annexed to the shares. Since the right to vote is a right of property attached to the shares, the beneficiary is entitled to ask the transferor to exercise the right as per his direction. The observations of Pratt J. [1943] 45 BLR 46 have been cited with approval by the Supreme Court in the case of Mathalone v. Bombay Life Assurance Co. Ltd. [1954] 24 Comp Cas 1. There is, therefore, good authority for the proposition that a constructive trustee can be asked by the beneficiary to exercise on his behalf all rights which pertain to his ownership of shares of a company. It is not, however, open to the beneficiary to ask the trustee nor can a trustee be compelled to undertake at the instance of the beneficiary, additional obligations. Thus, in the case if Mathalone v. Bombay Life Assurance Co. Ltd. [1954] 24 Comp Cas 1, the Supreme Court held that a constructive trustee who has sold his shares could not be compelled by the transferee to purchased new share which have been offered by the company to its members, especially because these were partly paid shares. The court observed (p. 15) : 'We see no principle of equity or of general law which obliges a trustee to buy new shares in his own name for the benefit of the 'cestui que trust' and when in so doing he has to bear a heavier pecuniary burden than he undertook to bear as constructive trustee by reason of the sale of his shares in favour of the 'certui que trust' and which relationship was contemplated to last only till the time when the shares sold could not be registered in the name of the transferee.'

14. The company, however, recognises only the person who is its member as a shareholder. In other words, the rights that may exist between the company and its members or shareholders can be exercised only by members. Similarly the company can only look to its members for the discharge of their obligations to the company as its shareholders. The only person, therefore, who is entitled to exercise these rights and privileges or discharge these obligations is the transferor. The transferee is an outsider as far as the company is concerned and his only right is to have the transfer registered and thus to get himself accepted as a member and shareholder of the company. If the transferee is denied this right, he has a remedy under ss. 111 and 155 of the Companies Act. cf. Ved Prakash v. Iron Traders (P.) Ltd. . He cannot, however, claim to exercise the rights or privileges as a member of the company or to discharge any obligations as a member or as a shareholder of the company. He can only exercise such rights through the transferor who is his constructive trustee. Applying this principle, the Supreme Court, in the case of Howrah Trading Co. Ltd. v. CIT [1959] 356 ITR 215; 29 Comp Cas 282, observed that the transferee cannot claim any benefit which a shareholder may be having. We have been addressed at length on the question whether a transferor can be compelled by the transferee to file a portion under ss. 397 and 398 of the Companies Act. It was submitted before us that the transferor can only be compelled by the transferee to perform those acts and duties which are attached to the holding of shares; for example, the transferee can compel the transferor to hand over to him dividends received in respect of such shares. He can also compel the transferor to hand over any benefits received in respect of these shares because these are rights of property which are attached to the shares. It was submitted that the transferee cannot compel the transferor to do anything more or to perform on his behalf or to exercise at his behest his other rights which are the rights arising from the membership of the company. More specifically, a transferee cannot compel a transferor to file a petition under ss. 397 and 398. It is not necessary to go into this aspect because in the present case the transferor has not resisted any demand made by the transfer to file a petition under ss. 397 and 398 of the Companies Act. In the present case, the transferor has agreed to exercise all his rights as a holder of shares in question at the behest if the transferee and has in fact given power of attorney for this purpose to the transferee. We may, however, point our that basically a constructive trustee is required to carry out all just and reasonable requests of the beneficiary. In so far as the rights pertaining to the property in the shares are concerned, there can be no doubt that all demands pertaining to the exercise of these rights would ordinarily be considered as just demands, though there may be special circumstances in a given case which may make the demand made by a beneficiary unreasonable, e.g., if a trustee is required to spend a large amount of money out of his own pocket in order to carry out the directions of the beneficiary. Broadly speaking, however, all the rights which are given to a member under the companies Act are rights given to him in his capacity an a shareholder of the company. These rights enable him to participate in the worming of the company as its shareholder. It is possible to say that the trustee can be asked by the beneficiary to exercise on his behalf not merely all rights and privileges attached to the shares but also conferred on the trustee by virtue of his being a shareholder so long as a trustee is not thereby asked to assume additional obligations or burdens, to spend any money from his own pocked or is put to any hardship. In the present case, the constructive trustee has not been put to any loss or hardship in filing the present petition because everything in connection with the filing of the petition has been cone by the transferees who hold a power of attorney from the transferors. Anyway, in view of the facts in the present case, we are not required to consider for the purpose of this present petition whether a transferee can compel a transferor to file a petition under ss. 397 and 398 of the Companies Act.

15. Is it open to the company to object to a member filing a petition under ss. 397 and 398 of the Companies Act on the ground that the member acting not in his own right but at the behest of an outsider, namely, the transferee Mr. Chagla, learned counsel for the company, has submitted that it is open to the company to so object. He has submitted that under ss. 397 and 398 of the Companies Act, every member who comes before the court must have a grievance, either that he has been oppressed or that the company is being conducted in manner prejudicial to public interest or in a manner prejudicial to the interest of the company. This grievance must be a personal grievance of member who comes before the court. It cannot be a vicarious grievance, a grievance of his beneficiary. In support of his submission, he also relies upon the provisions of s. 399 of the Companies Act. Under s. 399 of the Companies Act, certain qualifications have to be met before a member can file a petition under s. 397 or s. 398 of the Companies Act. In view of these provisions, member who holds less than 1/10th of the issued share capital of the company, cannot file such a petition. Nor can a stray member file such a petition. In the submission of Mr. Chagla this would indicate that the grievance which a member has, must be a substantial grievance and it must be a personal grievance. The argument does not, however, bear security. Under ss. 397 and 398 any personal grievance of the member himself is not contemplated. The cause of action under s. 397 is the conduct of the affairs of a company in a manner prejudicial to public interest or in manner oppressive to any member of members of the company. Now, prejudice to public interest may not necessarily amount to a prejudice to the complaining member personally. Even in the latter category, the oppression need not be of the members who file a petition. Oppression of other members can also be a grievance for filing a petition. Oppression of other member can also be a grievance for filing a petition under s. 397. The same is true of s. 398, which requires examination, not of any personal prejudice to the petitioning members but of prejudice caused to the public interest to the interest of the company. Section 399 cannot throw any further light on this aspect. It merely stipulates qualifications of members who are entitled to come under s. 397 and 398. It prescribes certain minimum qualifications which members should possess such as their numerical strength or the extent of their share capital. Under these provisions, therefore, any personal prejudice to the members for coming before the court is not required. Looked at form a slightly different point of view, even assuming that some personal prejudice is required and even assuming that only these persons will come before the court under these provisions as are personally prejudiced, it is possible to say that a transferor who is in the position of a constructive trustee qua the transfer is the only person who person who represents the interest of the transferee under the Companies Act. The only way in which a transferee can redress his grievance against the company is by acting through the transferor who holds the shares for the benefit to the transferee. The transferor who holds the shares for the benefit of the transferee. The transferor, therefore, when he applies under ss. 397 and 398 of the Companies Act, is acting in the interest of his beneficiary and he is seeking to redress the grievance of his beneficiary. Since he is bound by law to act in this manner, it cannot be said that such an action on this part is an action not to redress any grievance of his own because the interest of a beneficiary is in law the interest of the trustee.

16. If the terms 'member' under ss. 397 and 398 is countered to exclude all persons who have parted with the beneficial interest in the share, there will be a large number of members who would be deprived of remedies provided in ss. 397 and 398 of the Companies Act. In most companies, there are a large number of shares which are held by trustees under express trusts for the benefit of others. These trustees are the members of the company who would ordinarily be entitled to act on behalf of the beneficiaries and seek a remedy if so required, under ss. 397 and 398 of the Companies Act. If persons who do not possess both a legal and a beneficial interest in the shares are to be excluded form the category of members for the purposes of these sections, then such express trustees will also have to be excluded. The result will be that in such cases neither the beneficiary not the trustee can seek a remedy provided under s. 397 and 398 of the Companies Act. The trustee cannot come before the court, because although he is a member, he does not have any beneficial interest in the shares; while the beneficiary also cannot come because although he has a beneficial interest in the shares, he is not a member of the company. A similar situation will also arise in the case of the executors of a deceased member who holds the shares for the legalities. Such a situation is not contemplated under the Companies Act. We cannot interpret these two sections in a manner which will deprive a large number of members who represent the interest of their beneficiaries from seeking a remedy under ss. 397 and 398 of the Companies Act. Such an interpretation is sought to be justified on the ground that only persons who have a 'real' interest in the company are entitled to resort to ss. 397 and 398. But in that case were would have to hold that the transferees of shares should be countered as members for the purpose of ss. 397 and 398 of the Companies Act because they are the persons who have this 'real' interest in the shares. Similarly, the legal representatives of deceased members whose names might not have been brought on the register of members but to who the shares have been transmitted on the death of a member would also be persons who have a 'real' interest in the shares and who would be similarly entitled to apply under ss. 397 and 398 of the Companies Act. In fact, some privileges of membership have been extended to the legal representatives of a deceased member. Thus, in the case of Llewellyn v. Kasintoe Rubber Estates Ltd. [1914] 2 Ch 670, it was held that the executors of a deceased member who did not get the shares registered in their own names had the same right to dissent from a reconstruction scheme as the deceased member would have had. A reference may also be made to the case of Bayswater Trading Co. Ltd., In re [1970] 1 WLR 343 in this connection. In the case of Stated Pvt. Ltd., v. Kshetra Mohan Shah [1969] 39 Comp Cas 741 (Cal), a member whose name was wrongly removed from the register and who had obtained an order from the court for rectification of the register by reinstating his name, was held entitled to present a petition under ss. 397 and 398.

17. These are cases where persons whose names were not on the register of members were allowed to exercise membership rights. Except for one decision which will be discussed a little later, we have not been shown any case where a member has been prevented form exercising his rights on the ground that he has parted with his interest in the shares. On the contrary, such members have been considered as entitled to all rights and privileges of membership. Thus, in the case of Pulbrook v. Richmond Consolidated Mining Co. [1878] 9 Ch.D. 610, the articles of association of the company provided that no person should be eligible as a director unless he held 'as registered members on his own right capital of the nominal value of 500 at least' (Pound 500). It was held that beneficial Ownership was not necessary of a qualification. A registered holder of the required capital, though he had transferred his shares to another, was eligible to be a director.

18. The trend of judicial decisions appears to be to enlarge the category of membership rather than to restrict it. It is interesting to note the course of the English company law in this connection. Section 210 of the English Companies Act, 1948, was comparable to our s. 397. In the case of Jermyn Street Turkish Baths Ltd., In re [1970] 3 All ER 57 , the court held that the petitioners, who were the administrators of the estate of a deceased member of a company, had locus standi as members of the company to present a petition under s. 210 and held further that even that out the petitioners were not registered as members of the company, the personal representatives of the deceased member must be regarded as members of the company for the purpose of s. 210. Thus, instead if curtailing the terms 'member' in the provision similar to s. 397, the English court extended the term 'member' to cover the administrators of a deceased member also. The decisions was reversed in appeal but not on this point (cf. Jermyn Street Turkish Baths Ltd., In re [1971] 1 WLR 1042 . And though some authorities have doubted the correctness of the judgment, the position in England is snow governed by the new s. 75(9) of the Companies Act, 1980, under which this right of the administrators is expressly recognised. The English Companies Act, 1980, has altered its provisions in this respect and under s. 75, which deals with the powers of the court to grant relief against company in circumstances comparable to our s. 397, a new sub-s. (9) is inserted. As a result, the section is made applicable to 'a person who is not a member of a company but to who shares in the company have been transferred or transmitted by operation of law' in the same manner that the section is made applicable to a member of a company; and reference to a member or members is required to be construed accordingly in that section. In the absence of any such amendment in our Companies Act, it is not possible for us to construe ss. 397 and 398 of the Companies Act so as to include within its scope persons to who shares have been transferred but who are not on the register of members of the company. If this cannot be done in order to give a right to persons having a 'real' interest in the shares of the company, it cannot also be done by eliminating form the category of members, trustee, whether express or constructive, who are said not to have any real interest in the shares. In fact, it is conceded by Mr. Chagla, learned counsel for the company, that express trustees are entitled to file a petition under ss. 397 and 398 of the Companies Act. He sought to distinguish the position of a constructive trustee from that of an express trustee by saying that a constructive trustee was in the same position as a bare trustee and, therefore, he could not be said to have any real interest at all in the shares; while in the case of an express trustee, it is possible that such a trustee may be obliged to carry out certain duties under the deed of trust, he would have more rights than a bare trustee. In our view, this distinction does not in any way help the comply. Both express and constructive trustees basically represent the interest of their beneficiaries. If persons who represent interest the interest of their beneficiary. If person who represent interests of others are to be excluded, then both express and constructive trustees would have to be excluded, then both express and constructive trustees would have to be excluded from the term 'member'. For the same reason, if an express trustee who represents the interest of a beneficiary is a member or can be construed as a member for the purpose of ss. 397 and 398, then there is no reason why a constructive trustee should also not be so held as such a member.

19. It is a basic rule of construction that a section in a statute must be construed on the basis of the plain language used in the section. It is only in the case of any ambiguity that it is necessary to examine either the intention of the Legislature or the surrounding circumstances in order to remove such ambiguity. Maxwell on the Interpretation of Statutes, 12th edn., p. 29, has stated that :

'Where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise ....... Where, by the use of clear and unequivocal language capable of only one meaning, anything is enacted by the Legislature, it must be enforced, however, harsh or a absurd or contrary to common sense the result may be. The interpretation of a statute is not to be collected from any notions which many be entertained by the court as to what is just and expedient; words are not to be construed, contrary to their meaning, as embraced or excluding cases merely because no good reason appears why they should not be embraced or excluded. The duty of the court is to expound the law as it stands, and to leave the remedy (if one be resolved upon) to others.'

20. The Privy Council has observed in the case of Pakala Narayana Swami v. Emperor , that :

'When the meaning of words is plain, it is not the duty of the courts to busy themselves with supposed intentions.'

This principle is reiterated by the Supreme Court in the case of CIT v. Sodra Devi : [1957]32ITR615(SC) . It has observed that unless there is any ambiguity in the words used in the statue, it would not be open to the court to depart from the normal rule of construction which is that the intention of the Legislature should be primarily gathered from the words which are used. In our view, there is no ambiguity about the provisions of ss. 397 and 398 of the Companies Act and there is no need to go into the 'question of any supposed intention behind the enactment of ss. 397 and 398 for the purpose of construing the term 'member'.'

21. The argument advanced by Mr. Chagla that a person who does not hold any beneficial interest in the shares should not be considered as a member for the purpose of ss. 397 and 398 of the Act finds support in a decision of the Calcutta High Court in the case of Hunger ford Investment Trust Ltd. v. Turner Morrision & Co. Ltd. ilr [1972] Cal 286. In that case, the petitioners who were a company in winding up and who had filed a petition under ss. 397 and 398 claimed that they held 51% shares in the respondent company through their liquidator whose name appeared on the register of members of the respondent company. These shares were subject to an agreement for sale. This agreement of sale was itself in dispute. We need not go into the various contentions which had been raised between the purchaser, Mundhra, and the liquidator filed a petition against the respondents under ss. 397 and 398 of the Companies Act, one of the issues which was framed for determination was whether the petitioner was entitled to Maintain this application. The Calcutta High Court held that a member who seeks relief in case of oppression must be a kind of member who has not lost his voice in the management of the company form whose oppression he wants relief from the court without winding up the company. It also held that it would be unrealistic to hold that a member who has lost by reason of a decree for specific performance his whole right form oppression or prejudice. Having lost all rights as a shareholder or a member, there is not legal prejudice or oppression any more left for him to complain of within the meaning of s. 397 of the Companies Act. The court was also impressed by the fact that the liquidator had already realised the money value of the shares by mortgaging the shares with Bank Hoffman. Bank Hoffman had obtained a decree of foreclosure in respect of these shares. In view of these facts, the court held that the petitioning company in liquidation or its liquidator could not be considered as members of the company. Two facts which weighed with the court in coming to the conclusion that the petitioner or the liquidator could not be considered as members were : (1) that there was a decree of specific performance of an agreement of sale in respect of these shares, and (2) there was a foreclosure decree in respect of the mortgage created by the liquidator in respect of these very shares. In view of these facts, the Calcutta High Court appears to have come to the conclusion that the member who had filed a petition did not have any interest either in his own right or on behalf of anybody else in the shares of the company. The decision has turned upon those special facts. However, to the extent that the language of the decision suggests that a member who himself does not have any interest in the shares cannot file a petition under s. 397 of the Companies Act, we feel that the same is not acceptable. To hold thus would result in a large body of members being deprived of any recourse to s. 397 or s. 398. There can be a number of cases where a member, though he may not have any interest in the shareholding, may still be required to resort to these sections on behalf of other persons who have an interest in the shareholding and on whose behalf or at whose instance the member may be required to act.

22. The next submission made on behalf of the company was that the petitioner who comes before the court must come in respect of his entire shareholding. In the present case, the Bank of India had filed the petition as a holder of 16,706 shares. It holds other shares also in the company. The Union Bank of India has filed the petition as a holder of 5,000 shares. It also holds some additional shares in the company. The submission was that such a petitioner cannot file the petition. He must file the petition in respect of all his shares. It was submitted that membership in a company is one and indivisible and it would not be open to a member to file a petition under s. 397 or s. 398 in respect of only a part of his shareholding. Support was sought for this proposition from the provisions of s. 399. It was urged that under s. 399 a member or members holding not less than 1/10th of issued share capital can file such a petition provided that the applicants have paid all calls and other sums their shares. It was, therefore, submitted that calls must be paid in respect of the entire shareholding of as member. Under r. 88 of the Companies (Court) Rules, 1959, a petition under s. 397 is required to be in Form No. 43. Form No. 43 requires a schedule to be filed showing, inter alia, the names of members, the number of shares held and whether all calls and other sums due on the shares have been paid. It was, therefore, submitted that the scheme of s. 397, 398 and 399 contemplates that a member of the company must come to the court in respect of his entire shareholding. Let us examine this argument. In the first place, a petition under s. 397 is not required to be filed in respect of any shareholding. The petition is required to be filed by a member in his capacity as a member. A reference to shareholding is made in s. 399 only for the purpose of prescribing a minimum qualification. The requisite shareholding enables a member to file a petition under ss. 397 and 398. But the complaint that he makes is as a member of the company. Section 399 merely prescribes that in order to apply under ss. 397 and 398, the number of members who comes before the court should be either not less than 100 members or not less than 1/10th of the total number of members of the company, whichever is less. This part of the qualification does not make any reference to shareholding at all. It relates to the number of members in a company. He second hard of the qualification prescribes that in the alternative any member or members can come by way 1/10th of the issued share capital of the company (provided, of course, they have paid all calls and other sums due on their shares). Section 399 does not state that a member is required to come in respect of his entire shareholding and it is not possible to read this condition into s. 399. It was submitted that there will be serious difficulties if a member were to be permitted to petition only in respect of a portion his shares to somebody else or he might have retained only some other of his shares for himself and sold some of the shares to somebody else. In these cases, it is possible that one of the purchasers whose name is not registered in the register of members may be desirous of coming by way of a petition under s. 397 and the seller may be required to file such a petition on his behalf, while at the same time his own interest or the interest of the other purchaser form this may require him to defend such a petition. In such a situation it would be necessary for a member to be both a petitioner saw well as a respondent. Now, it is true that ordinarily it is not permissible for a person to be on two sides of the record even in different capacities. If a situation arises when a member may have such a conflict of interests, there would certainly be difficulties. While an express trustee may resign from one of the trusts in such a predicament, a constructive trustee does not have this facility. Perhaps one way of resolving much a difficulty would be by resorting to the exception which has been carved out to the rule that a person cannot be on two sides of the record even in different capacities. It is permissible for the same party of be both a petitioner and a respondent in cases where it is possible for the court to work out equities between the various parties who may be before the court whether in support of against the matter at issue. Such a situation normally arises when suits are filed in a representative capacity. In the case of Satyavart Sidhantalankar v. Arya Samaj, Bombay [1947] 17 Comp Cas 21 (Bom), it has been observed as under (p. 50) :

'In proper cases, the court would, in spite of that elementary rule of procedure, have the power to deal out justice between the parties even disregarding the elementary rule of procedure which requires that the same individual even in different capacities cannot be both a plaintiff and a defendant.'

23. In that case, the plaintiffs had come in a representative capacity as member of a society called 'the Arya Samaj'. The respondents were the members of the managing committee of Arya Samaj. A difficulty arose because the members of the managing committee who wee the defendants would also be included in the category of member of the society and hence be the plaintiffs. The court thereupon made the above observations. Whether such an exception can be carved out is the case of a petition under s. 397 or not would be a matter for the court to decide as and when such a situation arises. But it should be borne in mind that here would be difficulties even if we hold that a member would be required to come in respect of his entire shareholding and that, as a necessary corollary, a member who could not came in respect of his entire shareholding would be debarred from making an application under ss. 397 and 398 of the Companies Act. e.g., some of the share of a member may be locked by appointment of a receiver. If he still has the requisite shareholding without including those shares, he could have filed a petition under s. 397, which he would not be allowed to do because he would not be filing the petition in respect of his entire shareholding. Similar, a shareholder who has sold only a small portion of his shareholding will not be able to petition if for some reason, the purchaser has not got his name entered in the register of members. Thus, there are anomalies either way. In such a situation we can only adopt the language of Chagla C.J., in Walchandnagar Industries Std. v. Ratanchand Khimchand Motishaw that :

'It is never a safe guide for a construction of a section merely to look at certain anomalies that may result from a particular interpretation being put upon the section. It is true that a court must, if it can possibly do so, give an interpretation to a section which would not result in difficulties in the working of that section. But, on the other hand, many legislations, and socially modern legislations, have been so framed and so drafted that some anomaly or other is inevitable, and when such anomalies present themselves to the court, the duty of the court is to draw the attention of the Legislature to the removal of these anomalies and not to remove them itself by giving a construction contrary to the intention of the Legislature.'

24. It is interesting to note that there is no provision corresponding to s. 399 of the Companies Act in the English Companies Act. Under the English Act, it is open to any member to complain about oppression and mismanagement. We have, however, chosen to impose a qualification on that right. Buy reason of such a qualification it is not, however, possible to hold that a member cannot rely upon only the requisite shareholding as makes this eligible for portioning. In fact, by virtue of the provisions of s. 399, there may be number of cases where there might be difficulties; for example, it is argued before us that if a person were to purchase one share each from 100 members of the company, he could couple 100 members of file a petition under s. 399 while if the purchaser had been registered by the company, he would not be able to do so. These are the difficulties which arise by reason of the fact that legal interest and beneficial interest in the shares are held by different person. We cannot deal with hypothetical difficulties of this type. They will have to be resolved as an when occasion arises depending upon the facts and circumstances of the case. What is more important - all likely difficulties are not resolved by holding that a member must petition in respect of his entire shareholding.

25. It was next submitted that a right to apply under ss. 397 and 398 of the Companies Act is a right which is personal to the members. He is required to exercise his own discretion. He cannot delegate his right under ss. 397 and 398 to anybody else. Since in the present case the Bank of India and the Union Bank of India as well as the consenting members have delegated their rights to petitioners Nos. 4 and 5 who have filed the petition on the basis of such delegation of authority, the petition is bad in law and not maintainable. This submission, however, cannot be accepted. One of the cardinal principles of law is that an agency can be created for all lawful purposes and all rights can ordinarily be delegated. In Bowstead on Agency, 14th edn., p. 23, it is stated as follows :

Article 7. An agent may be appointed for the purpose of executing and deed or doing any other act on behalf of the principal, which the principal might himself execute, make or do; except for the purpose of executing a right, privilege or power conferred, or performing a duty imposed, on the principal personally, the exercise or performance of which requires discretion or skill, or for the purpose of doing an act which the principal is required, by or pursuant to any statute, to do in person.'

'The true position is that subject to certain well-known exceptions, every person who is sub-jurist has a right to appoint an agent for any purpose whatever, and he can do so when he is exercising a statutory right no lees than when he is exercising any other right.'

27. This was a case under the Industrial Disputes Act. The court came to the conclusion that the representation of an employer company by a duly authorised agent was not excluded by s. 36, sub-s. (2) of the Industrial Disputes Act, 1947. Exception to this rule are basically two-fold; firstly delegation is not permissible when such delegation is prohibited by the statute or by the instrument conferring such a right. Secondly, delegation is not permissible when the power which is required to be exercised is inherently such that it cannot be delegated, e.g., when a person on whom power is conferred possesses some personal knowledge or personal skill or judgment and the power is conferred on him relying on this special personal quality or skill or judgment. In such a situation, the person on whom the power is conferred cannot delegate it to anybody else, e.g., when parties appoint a valued, he is required to exercise his own judgment. On the same principle, judicial authority cannot be delegated. Same would apply to cases, where, for example, the consent of the Advocate General or of the Charity Commissioner is required. In the present case, there is nothing in s. 397 or s. 398 to indicate that any special personal skill, judgment or quality of a member is retired to be used when a member exercises his right under s. 397 or s. 398. In as broad sense every person who is required to exercise any right or privilege is required to apply his mind. But this does not disable him from appointing an agent to exercise that right or privilege. In fact, there may be number of cases where a person conceded may be unable to apply his mind, e.g., an illiterate person who is not aware of the facts or a person who is to ill or infirm to exercise the power. Such person are entitled to appoint an agent to look after their affairs. It is the agent who will apply his mind to the affairs of his principal and use his own judgment. Members who are given a right to file a petition under ss. 397 and 398 can, therefore, delegate their right to an agent who can exercise that right on their behalf. It was argued that under the Companies Act, whenever delegation is permissible, it is expressly provided. Our attention was drawn to some of the sections of the Companies Act where delegation is expressly permitted, e.g., under s. 60, it has been provided that prospectus may be signed by an agent of the director or proposed director. This, however, cannot imply that the right and privileges which are given to members under the Companies Act are incapable of delegation unless expressly so provided. There is nothing in the Companies Act to suggest that it prohibits the application of the normal law of agency to the acts and obligations required to be performed under the Act.

28. The same would be true in respect of the power to give consent under s. 399 of the Companies Act. Under sub-s. (3) of s. 399 where any member of a company is entitled to make an application by virtue of sub-s. (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them. It has been submitted that the consent which is required to be given by members under sub-s. (3) of s. 399 for the purpose of filing a petition under ss. 397 and 398 must be given by the members themselves. The power to give consent cannot be delegated. This submission also cannot be accepted for the same reason as the previous submission. It is true that the person who gives canniest is required to apply his mind. But a person who appoints an agent therefore, the application of mind by the agent when he gives his consent that becomes relevant in such cases. Our attention was drawn to the decision in the case of Makhan Lal Jain v. Amrit Banaspati Co. Ltd. : AIR1953All326 . In that case, the members who were said to have given their consent in wonting to an application under s. 153C(3) of the Indian Companies Act, 1913, were held not to have given their consent because the only document that was presented to court of showing such consent was a document containing their signature and the court held that obtain in signature of shareholders on a blank piece of paper cannot be considered as their consent in writing. It is difficult to see how this decision helps the company. Similarly in the cases of Bengal Laxmi Cotton Mills Ltd., In re [1956] 354 Comp Cas 187 (Cal) the Calcutta High Court upheld the contention that s. 399 does not require that the consenting members should have the petition in front of them before they given their consent and for that purpose, the petition should be prepared well in advance of the consent in writing given by the members. This decisional so does not throw any light on the question whether the right to give consent can be delegated or not. The decision of the Madras High Court in the case of M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp Cas 154 also does not advance the argument of the company. In that case, the Madras High Court held that from the very nature of the case, 'consent in writing' contemplated in s. 399(3) of the Act is a consent to the filing of a particular petition with a particular allegation for a particular relief under s. 397 or s. 398 or under both. They upheld the decision of the Calcutta High Court, namely, that it was not necessary to prepare in advance the actual petition and show it to the consenting members, but it was necessary that the members, before they give their consent, ought to know about the nature of the particular petition and the nature of the allegation which would be made as well as the nature of relief which would be claimed. The Madras High Court said that there could not be a blanket consent. This decision also does not deal with the right of a member to delegate his power to give consent. All these decisions deal with cases where the members themselves had given their consent and the court was required to consider whether to consent was given by the members after applying their mind to the nature of the petition which was being filed, to the allegations contained in it and the reliefs which were sought. In fact there can be no quarrel with the proposition that consent cannot be given in vacuo. Consent must be given after applying the mind to the act for which consent is required and it has been so held by our High Court also in the case Walchandnagar Industries Ltd. v. Ratanchand Khimchand Motishaw [1953] 23 Comp Cas 343. But a person can delegate his authority to give consent. In that case, the agent may apply his mind and drive consent on behalf of his principal, except in such cases where the authority of the principal is not capable of delegation. Consent under s. 399 is not such an exceptional case.

29. We have next to examine whether under the powers of attorney which have been given in the present case, the power of attorney holders has in fact any authority of file a petition under ss. 397 and 398 of the Companies Act. In the present case, the Bank of India has given a power of attorney in respect of 16,706 shares in favour of the fourth and fifth petitioners and two others. It has also given a power of attorney in respect of 481 shares to the fourth and fifth petitioners and two others. The Union Bank of India has given a power of attorney in respect of 5,000 hires to the fifth petitioner and two others. The consenting shareholders have given powers of attorney in favour of the fourth and fifth petitioner and two others. Apart from the power of attorney given by the Bank of India in respect of 16,706 shares, all the other powers of attorney are in identical terms and it will suffice to reproduce the relevant clauses form the power of attorney dated March 27, 1981, from the Union Bank of India to the fifth petitioner and two others :

'WHEREAS 5,000 equity shares in the capital of Killick Nixon Ltd. (a company having its registered office at Killick House, Charanjit Rai Marg, Bombay, 400 001 and hereinafter called 'the company' bearing distinctive numbers whereof are contained in annexure 'A' hereto (hereinafter referred to as 'the said shares'), stand in our name in the records of the said company but the beneficial interest whereof belongs to Dhanraj Mills P. Ltd., the said Dhanraj Mills P. Ltd. having purchased the said shares for valuable consideration. ....

NOW KNOW YE AND THESE PRESENTS witness we the said Union Bank of India do hereby NOMINATE CONSTITUTE AND APPOINT.

(1) Balkrishna Ramgopal Ruia

(2) Tejkumar Balkrishna Ruia and

(3) Hirendrakumar Balkrishan Ruia jointly and severally to be our true and lawful attorneys in our name and on our behalf to do or cause to be done the following acts, deeds, matters and things, that is to say :

1. To exercise for us and in our name all rights and privileges and perform all duties which now or hereafter may appertain to us as holders of the said shares of the said company standing in our name and also in respect of any new shares which may be allotted or issued to us by the said company either as right shares (hereinafter called 'the said right shares') or bonus shares (hereinafter called 'the said bonus shares') as a result of hurt being holders of the said shares. ......

5. To file such suit or suits or to file such appeals to take such proceedings in respect of the said shares, the said right shares and the said bound shares against the company or against any other person for such reliefs as our attorneys or attorney shall think fit and to denied all suits, appeals and other proceedings which may be filed or taken by any person, company or party against us in respect of the said shares, the said right shares and the said bonus shares or any of them.

6. To represent us before any court, the Company Law Board, any other authority of officer in respect of any matter or proceedings relating to the said share, the said right shares and the said bound shares or in any matter or proceedings concerning the said company. .....

13. GENERALLY to act in relation to the premises as fully and effectually in all respects as we ourselves could of personally present.'

30. Under cl. 1 of the power of attorney, the power of attorney holder is authorised to exercise on behalf of the Union Bank of India all rights and privileges and to perform all duties which pertain to the Union Bank of India in its capacity as shareholder of 5,000 equity shares of the company. Thus, under clause 1, the power of attorney-holder is entitled to exercise all rights and privileges and to perform all duties which the Union Bank of India would have exercised as a shareholder Rs. 5,000 shares. This would necessarily include a right to file a petition under ss. 397 and 398 of the Companies Act which rights was possessed by the Union Bank of India as a shareholder of 5,000 equity shares. The other powers which are given in the power of attorney are specific powers which spell out some of the rights, privileges and duties which have been so delegated under cl. 1 of the power of attorney. Thus, under cl. 5, a specific power is given to file suits, appeals and to take such proceedings in expect of these shares, against the company or against any other person for such reliefs as the attorney may think fit. Under cl. 6, the holder of the power of attorney has been given an authority to represent the bank before any court, the Company Law Board or any other authority. Clause, 1, however, is in general terms and it confers on the agent all rights and privileges of the principal as a holder of 5,000 equity shares. The clauses that follow specify some of these rights and privileges. In case where a general power is given followed by specific powers the specific powers so given do not curtail the generality of the powers conferred by the earlier clauses. However, where a specific power is given followed by the conferring of general powers, the rule of ejusdem generis would apply and the general powers must be read as being in furtherance of the specific power and not as enlarging the specific power so given. Thus, in the case of Timblo Irmaos Ltd. v. Jorge Anibal Matos Sequeira, : [1977]2SCR451 , the Supreme Court sets out the rule construction to the effect that general words following words conferring specifically enumerated powers cannot one construed so as to enlarge the restricted powers there mentioned. It goes on to observe that (at p. 739) :

'In fact, in a case like the one before us, where a general power of representation in various business transaction is mentioned first and then specific instances of is are given, the converse rule, which is often specifically stated in statutory provisions (the rules of construction of statutes and documents being largely common) applies. That rule is that specific instances do not derogate from the width of the general power initially conferred. To such a case the ejusdem generis rule cannot be applied.'

31. Our attention was drawn to art. 24 at p. 75 of Bowstead on Agency, 14th addition, where the rules of construction for power of attorney have been laid down as follows :

'Powers of attorney must be strictly construed, and are interpreted as given only such authority as they confer expressly or by necessary implication. The following are the most important rules of construction :

(a) The operative part of a deed is controlled by the recitals where there is ambiguity.

(b) Where authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the proper performance of the particular acts.

(c) General words do not confer general powers, but are limited to the purpose for which the authority is given, and are construed as enlarging the special powers only when necessary for the purpose.

(d) The deed must be construed so as to include all incidental powers necessary for its effective execution.'

32. In the present case, there is no ambiguity about cl. 1 of the power of attorney. Even if we construe cl. 1 with reference to the recital, the recital clearly mentions that the power of attorney is in respect of 5,000 equity shares which are held by the Union Bank of India and which stand in the name of the Union Bank of India in the records of the company but in respect of which the beneficial interest belongs to the third petitioners who have purchased these shares for valuable consideration. The power of attorney is thus given to the beneficiaries so that they may exercise all rights, privileges and perform all duties in respect of 5,000 shares as agents of the Union Bank of India. There is therefore, no substance in the contention that the powers of attorney do not authorise the holders of powers of attorney to file petition under ss. 397 and 398 of the Companies Act. There is a similar clause in the powers of attorney given by the consenting members also. The right to give consent under s. 399, sub-s. (3), is a right which belongs to the members of the company and under cl. 1, this right is also delegated to the power of attorney-holder.

33. The power of attorney given by the Bank of India in respect of 16,706 shares, however, is said to stand on a slightly different footing because in the power of attorney which his given by the Bank of India in respect of 16,706 shares, the cls. 5, 6, 8, 13 and 14, which were originally there were deleted and the power of attorney at it stands does not contain these clauses. For the present purpose, the relevant clauses are cls. 5, 6, and 13. Under cl. 5, power is given to file suits, appeals and take proceedings in respect of shares; cl. 6 authorises the power of attorney holder to represent the shareholder before any court, the Company Law Board or any other court, while cl. 13 is a general clause enabling the power of attorney holder to act in relation to the premises as fully and effectually in all respects as the shareholder could do if personally present. It is submitted that because of the deletion of these clauses from the power of attorney given on behalf of the Bank of India, it would not be open to the petitioners to file the petition on behalf of the Bank of India in respect of 16,706 shares. There are other circumstances also, which, according to the company, are relevant for the purpose to construing the power of attorney given by the Bank of India in respect of 16,706 shares. Those circumstances relate to the filing of the present petition. It has been submitted that the power of attorney given by the Bank of India in respect of 16,706 shares was not shown by the petitioners at the time when they filed the petition though other powers of attorney were disclosed not was a xerox copy of the power of attorney filed. The suggestion is that the power of attorney in question was surprised from the court at the time when the petition was filed. It was only subsequently that the power of attorney was shown to the court. At the time when the petition was being heard by the learned single judge, Mr. Cooper, learned counsel for the petitioners, stated that he had been asked by the Bank of India to state to the court that the petitioners had no authority from the Bank of India to file the petition. Now, can all these circumstances affect in any way the construction of the power of attorney given by the Bank of India in respect of 16,706 shares The power of attorney has to be construed as it stands. Clauses 1 of all other powers of attorney which in terms is identical with cl. 1 of all other powers of attorney confers very wide powers on the holder of the power of attorney including the power to file a petition under s. 397 or s. 398. Omission of certain specific powers set out after general powers given in cl. 1 cannot in any way curtail the provisions of clause 1. The so-called surrounding circumstances which incidentally are not the surrounding circumstances relating to the execution of the power of attorney, but which refer to events that transpired later on, cannot in any way throw any light on the construction of the power of attorney. Nor can the statement made in court in any way affect the provisions of the power of a attorney. The document has to be construed as it stands. It is only in the case of ambiguity in a document that it is possible to look at the circumstances surrounding the execution of the power of attorney, as well as antecedent correspondence, or the conduct of the parties. Such a situation has not arisen in the present case. In the case of Bomanji Ardeshir Wadia v Secretary of State for India : (1929)31BOMLR256 , the Privy Council observed that (p. 36 of AIR 1929 PC) :

'... this way of approaching the true construction of the deed is quite legitimate ..... Nothing is better settled that that when parties have entered into a formal contract, that contract must be construed according to its own terms and not be explained or interpreted by the antecedent communing which led up to it.'

34. The same position has been reiterated in the case of Sunitabala Debi v. Manindra Chandra Roy Chaudhury, AIR 1930 PC 271; 32 BLR 1553, where the deed was considered as it stood even if the result was that the document was found to embody a bargain intended by neither of the parties to it. In view of these settled principles, the power of attorney given by the Bank of India as the holder of 16,706 shares must be construed as it stands. Under cl. 1 of this power of attorney, the holder can exercise all rights and privileges that the holder of 16,706 shares could have exercised. This would include the right to file a petition under ss. 397 and 398.

35. In any case, for the purpose of the present appeal, it is not necessary to take into account 16,706 shares which are the subject-matter of the disputed power of attorney. The shareholding necessary for maintaining the present petition is 12,495 shares which constitutes 1/10th of the share capital of the company. Even if 16,706 shares of the Bank of India are excluded, the other petitioners between them hold 16,303 shares; these consist of 5,000 shares of the Union Bank of India 20 shares each of petitioners Nos. 3 and 4, 10 shares of petitioner No. 5 and 11,253 shares of the consenting members. These shares constitute more than 1/10th of the share capital of the company. Even if the power of attorney given by the Bank of India is ignored, the petition will be maintainable.

36. In the premises, in our view, the petitioners have the requisite locus standi to maintain the petition in question. The learned single judge has rightly dismissed the judge's summons.

37. The appeal is, therefore, dismissed with costs. Costs to be on a long cause scale in view of the issues involved and are quantified at Rs. 15,000.

38. Mr. Chagla makes a statement that the general body meeting of the company will not be held before March 31, 1982.